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  • 1.

    Other than transactions between dealers, what are the most typical types of over-the-counter (OTC) equity derivatives transactions and what are the common uses of these transactions?

  • 2.

    May market participants borrow shares and sell them short in the local market? If so, what rules govern short selling?

  • 3.

    Describe the primary laws and regulations surrounding OTC equity derivatives transactions between dealers. What regulatory authorities are primarily responsible for administering those rules?

  • 4.

    In addition to dealers, what types of entities may enter into OTC equity derivatives transactions?

  • 5.

    Describe the primary laws and regulations surrounding OTC equity derivatives transactions between a dealer and an eligible counterparty that is not the issuer of the underlying shares or an affiliate of the issuer? What regulatory authorities are primarily responsible for administering those rules?

  • 6.

    Do securities registration issues arise if the issuer of the underlying shares or an affiliate of the issuer sells the issuer’s shares via an OTC equity derivative?

  • 7.

    May issuers repurchase their shares directly or via a derivative?

  • 8.

    What types of risks do dealers face in the event of a bankruptcy or insolvency of the counterparty? Do any special bankruptcy or insolvency rules apply if the counterparty is the issuer or an affiliate of the issuer?

  • 9.

    What types of reporting obligations does an issuer or a shareholder face when entering into an OTC equity derivatives transaction on the issuer’s shares?

  • 10.

    Are counterparties restricted from entering into OTC equity derivatives transactions during certain periods? What other rules apply to OTC equity derivatives transactions that address insider trading?

  • 11.

    What additional legal issues arise if a counterparty to an OTC equity derivatives transaction is the issuer of the underlying shares or an affiliate of the issuer?

  • 12.

    What types of taxation issues arise in issuer OTC equity derivatives transactions and third-party OTC equity derivatives transactions?

  • 13.

    Describe the liability regime related to OTC equity derivatives transactions. What transaction participants are subject to liability?

  • 14.

    What stock exchange filings must be made in connection with OTC equity derivatives transactions?

  • 15.

    What types of documents are typical in an OTC equity derivatives transaction?

  • 16.

    For what types of OTC equity derivatives transactions are legal opinions typically given?

  • 17.

    May an issuer lend its shares or enter into a repurchase transaction with respect to its shares to support hedging activities by third parties in the issuer’s shares?

  • 18.

    What securities registration or other issues arise if a borrower pledges restricted or controlling shareholdings to secure a margin loan or a collar loan?

  • 19.

    If a borrower in a margin loan files for bankruptcy protection, can the lender seize and sell the pledged shares without interference from the bankruptcy court or any other creditors of the borrower? If not, what techniques are used to reduce the lender’s risk that the borrower will file for bankruptcy or to prevent the bankruptcy court from staying enforcement of the lender’s remedies?

  • 20.

    What is the structure of the market for listed equity options?

  • 21.

    Describe the rules governing the trading of listed equity options.

  • 22.

    What categories of equity derivatives transactions must be centrally cleared and what rules govern clearing?

  • 23.

    What categories of equity derivatives must be exchange-traded and what rules govern trading?

  • 24.

    Describe common collateral arrangements for listed, cleared and uncleared equity derivatives transactions.

  • 25.

    Must counterparties exchange collateral for some categories of equity derivatives transactions?

  • 26.

    What is the territorial scope of the laws and regulations governing listed, cleared and uncleared equity derivatives transactions?

  • 27.

    What registration or authorisation requirements apply to market participants that deal or invest in equity derivatives, and what are the implications of registration?

  • 28.

    What reporting requirements apply to market participants that deal or invest in equity derivatives?

  • 29.

    What legal issues arise in the design and issuance of structured products linked to an unaffiliated third party’s shares or to a basket or index of third-party shares? What additional disclosure and other legal issues arise if the structured product is linked to a proprietary index?

  • 30.

    Describe the liability regime related to the issuance of structured products.

  • 31.

    What registration, disclosure, tax and other legal issues arise when an issuer sells a security that is convertible for shares of the same issuer?

  • 32.

    What registration, disclosure, tax and other legal issues arise when an issuer sells a security that is exchangeable for shares of a third party? Does it matter whether the third party is an affiliate of the issuer?

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View more information about Ritch, Mueller, Heather y Nicolau SC


Mexico City
Pedregal 24, 10th floor
Molino del Rey
11040
Mexico City
Mexico
T: +52 55 91787050
F: +52 55 91787095


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